Landfill Disposals Tax site restoration relief: technical guidance

This guidance provides an overview of the arrangements for relief for site restoration work (under Parts 2 and 3 LDTA).

The approach under LDT differs from arrangements in other parts of the UK as landfill site operators will need to obtain WRA’s approval for site restoration work in advance of claiming relief in their tax return.

This approach aims to provide certainty and clarity to landfill site operators and to the WRA, to enable compliance and to safeguard arrangements from abuse.

Reliefs are only available for disposals at authorised landfill sites.

Under section 8 LDTA, the use of any material for site restoration work is to be treated as a taxable disposal. LDT is due on the use of all material in site restoration, regardless of whether the material was bought for the purpose or was otherwise obtained.

However, an authorised landfill site operator may claim relief for the use of material in site restoration work, if certain criteria are met.

The work must fall within the definition of site restoration, which is work carried out at an authorised landfill site (or part of it) to restore the area to an alternative use. 

On a hazardous or non-hazardous landfill site, where engineered capping is generally required for environmental reasons, site restoration work can only be work that takes place above the cap. Inert landfill sites are generally not required to have an engineered cap for environmental reasons, but, following amendments to the legislation on 16 July 2019, they may still be able to show that they are carrying out site restoration work. 

The relief must be claimed in a tax return and is only available where the disposal to which it relates consists either entirely of qualifying material (it is not available for qualifying mixtures of materials) or entirely of top-soil, and forms part of restoration work which has been approved by the WRA.

The WRA consider top-soil to include manufactured top-soil containing organic material where it is required to complete the site restoration as specified in the environmental permit or planning permission to support the planting of grass, plants, shrubs or trees. In order to obtain site restoration relief on top-soil, the WRA would expect top-soil, including manufactured top-soil, whether manufactured on or off site, or soil conditioners which may be applied to reach the required standard, to comply with the requirements of the relevant environmental permit and meet recognised industry standards, such as BS 3882:2015 Specification for topsoil and/or PAS 100:2011 Specification for composted materials for example.

In order to obtain the WRA’s approval to restoration work, a landfill site operator must apply in writing to the WRA. The application must be made before the restoration work begins; the WRA cannot authorise restoration work which began before the application was submitted. After an application is made, landfill site operators do not need to wait for the WRA’s approval before beginning the work. This recognises that landfill site operators may want to take advantage of good weather conditions or the availability of suitable material. However, commencing work in such circumstances before obtaining the WRA’s approval is at the landfill site operator’s own risk, as there is no guarantee that the WRA will approve the application.

Within the application the Landfill Site Operator must provide the WRA with the details and evidence of how the weight of restoration material required for site restoration has been calculated. The calculations should be accompanied by a rationale and evidence explaining how the volume, volume to mass conversion factors and shrinkage or bulking factors have been derived and used in the calculation.

In order to give approval, the WRA must be satisfied that the work is required by a condition of an environmental permit or planning permission relating to the site. Only the necessary amount of material required to comply with the permit or permission will benefit from the relief. The use of excess material will be subject to tax.

Where a landfill site operator makes an application for approval of site restoration work, the WRA may issue a notice in writing to the landfill site operator to request further information for the purpose of deciding whether, or on what terms, to give approval. The WRA must issue the notice within 30 days beginning on the day WRA receives the application from the landfill site operator.

The WRA must inform the landfill site operator of the time period in which the further information must be provided and this must be at least 30 days beginning with the day on which the notice is issued.

The WRA and the landfill site operator may agree to extend these time periods.

The WRA must issue a notice in writing to the landfill site operator of its decision within 30 days beginning with:

• the day the WRA receive the application; or
• if the WRA has requested further information:
  • the day on which the WRA receives the information or;
  • the day on which the period for providing the information ends

The WRA and the landfill site operator may agree to extend these time periods.

If the WRA does not issue a notice of its decision within these time periods, then the WRA is to be treated as having approved the carrying out of the restoration work as detailed in the application. This will include any of the work that was carried out between the time when the application was made and the time when that period ended.

It will be possible to review or appeal the WRA’s decision to give approval for site restoration.

If the WRA gives approval, the notice informing the landfill site operator of its decision must also set out details of the approval.

The approval given by the WRA may relate to all or part of the work described in the application for the approval; may relate to work carried out before or after the approval is given (or both) and; may be unconditional or subject to conditions, for example, a condition might require the landfill site operator to provide an update report to the WRA about the carrying out of the work.

Where an approval is in place for carrying out restoration work, the landfill site operator may apply in writing to the WRA for variation of the approval. This might be necessary if the requirements of the site restoration set out in the environmental permit or planning permission change.

If the WRA requires further information for the purpose of deciding whether, or on what terms to vary the approval then the time periods set out should be followed.

The WRA must issue a notice of its decision in writing to the landfill site operator. The time periods set out in LDTA/4030 should be followed.

The WRA may also vary the approval on its own initiative, if it is satisfied the variation is necessary to ensure the approval relates only to restoration work required by a condition of an environmental permit or planning permission related to the site.

If the WRA varies an approval on its own initiative, it must issue a notice in writing to the landfill site operator setting out the details of the variation.

The variation of an approval does not affect the restoration work carried out in accordance with the approval before it was varied.

The use of material for site restoration without WRA approval will not benefit from the relief.

Where approval is given, the relief is only available where it forms part of restoration work carried out in accordance with an approval by the WRA and meets all other requirements set out in LDTA and TCMA, for example keeping and preserving records to support a correct and complete tax return.

The WRA may make an assessment for tax where it believes there to have been a loss of tax, specifically where relief in respect of a devolved tax has been claimed or given that is or has become excessive. Furthermore, the landfill site operator may be liable to penalties under TCMA, such as penalties for inaccuracies in tax returns and failure to pay tax.